This audio is automatically generated. Please let us know if you have any comments.
Construction stress rebounded in March after one of its lowest readings in more than a year, according to the latest data from Cincinnati-based ConstructConnect.
The Project stress indexa measure of construction projects that have been stalled, abandoned or have a late bid date, rose 4.2% month-on-month in March. A 22.8% increase in project abandonments, which ConstructConnect linked to the impacts of the Iran war, led to the increase.
“This escalation marks the largest month-over-month increase in abandonments since late 2025, when stressful conditions increased during the longest government shutdown in US history,” ConstructionConnect Associate Economist Devin Bell told Construction Dive. “The current increase in abandonments coincides with the developing conflict with Iran as it continues to disrupt the flow of key goods through the Strait of Hormuz.”
On a positive note, backlog bid activity and projects on hold fell 1.2% and 9.9% month-on-month, respectively.
Despite the monthly increase, stress levels were higher at this time last year, when contractors pulled back due to high interest rates and concerns about President Donald Trump’s introduction of tariffs. Since then, the stress index has dropped by 3.5%, according to ConstructConnect.
However, contractors over the past year have reported a strain in private construction activity, particularly for work outside of the data center boom. No data center projects, commercial construction planning is down 12.7% since March 2025.
“The increase in March dropouts has primarily affected the private sector,” Bell said. “The combination of already high construction input costs and disrupted commercial oil flows may prompt private sector owners and developers to abandon projects as they struggle with rising input costs.”
Input costs increased to Annualized rate of 12.6%. during the first two months of 2026. Economists warned that these pressures were likely to only intensify in the coming months as the latest data preceded the impact of the Iran war on oil prices.
Public and private project abandonments decreased by 17.2% and 4.6%, respectively, compared to this time last year. Meanwhile, over the past 12 months, pending public projects rose 9.4 percent, while pending private work fell 79.7 percent, according to ConstructConnect.
“The decline in private withholdings is primarily due to the high levels we followed through the first half of 2025,” Bell said. “Now, private withholdings have returned to levels much closer to historical averages.”
